By Chris Hoenig
Photo by Shutterstock
Blacks and Latinos use their smartphones to do their banking more than any other race or ethnicity, according to a new study. The results of the Pew Research Center survey released this month serve to confirm a report from the Federal Reserve Board (FRB) last year, which found that Blacks and Latinos make up a "disproportionately high rate" of mobile-banking users.
The Pew study found that the popularity of mobile banking is growing quickly, having nearly doubled in the past two years. Among the respondents, 41 percent of nonwhites say they use their smartphones to check their balances and make other transactions, including 39 percent of Blacks. Only 32 percent of whites said they bank on their cell phones, which is below the overall national average of 35 percent.
And while banking on traditional desktops/laptops is also on the rise, white Americans lead that group. Sixty-three percent of whites say they bank online, as well as 62 percent of Latinos, but only 48 percent of Blacks reported using standard Internet connections to do their banking—a combination of statistics that some researchers don't find surprising.
A 2010 survey by Nielsen found a variety of stats that give credence to the Pew and FRB studies. Among cell-phone owners, more Latinos (45 percent) and Blacks (33 percent) had smartphones than whites (27 percent). By 2013, that number was up to 71 percent for Blacks, compared to a national average of just 62 percent.
Blacks also used their phones more than any other racial or ethnic group—averaging more than 1,300 voice minutes and 780 text messages a month—and their use of mobile data and apps is very high. "Black consumers are also 30 percent more likely to visit Twitter using mobile phones than the average customer," Nielsen spokesman Matthew Hurst said.
Rutgers University Assistant Professor of Communication Vikki Katz tells DiversityInc that socioeconomic factors likely play a large role, pointing to additional Pew data that show less overall use of home-based broadband Internet by the Black community. "Higher rates of mobile banking are not surprising among individuals who, if they choose to do online banking, can only do so via a mobile device," she said, "as opposed to being able to choose between doing so on a mobile phone or a PC.
"There may be multiple factors in play simultaneously: higher rates of smartphone Internet use, less home-based broadband, environmental constraints and, perhaps, social norms related to online activity among family and friends."
Dedrick Muhammad, Executive Director of the Financial Freedom Center, also believes that being able to get to banks themselves is a factor. "Historically, access to brick-and-mortar banks is not as prevalent in African-American communities," he said, adding that many banks charge higher fees to bank in person than online. "So you have a cheaper product, using a cheaper means that provides greater access to African-Americans. It makes sense that African-Americans use mobile banking more."